Short answer: The median bank earned an annualized return on equity of 11.55% through the quarter ending June 30, 2026, across 4,229 banks. The middle half ran from 7.59% to 15.67%. Of those banks, 60.4% were at 10% or better and 28.5% at 15% or better. Only 4.0% lost money. A good ROE is one in the top half of your own size band, and it means more when it comes from return on assets than from thin capital.
Return on equity by asset size
We calculate ROE as year-to-date net income (Schedule RI), annualized, over average total equity capital (Schedule RC), averaging the prior year-end and current quarter-end balances. For the second quarter of 2026, that is first-half earnings doubled.
| Bank size (total assets) | Banks | Bottom quartile | Median | Top quartile |
|---|---|---|---|---|
| All banks | 4,229 | 7.59% | 11.55% | 15.67% |
| Under $100M | 537 | 3.31% | 8.15% | 12.61% |
| $100M to $300M | 1,213 | 7.40% | 11.50% | 15.89% |
| $300M to $1B | 1,433 | 8.44% | 12.47% | 16.89% |
| $1B to $3B | 625 | 8.51% | 11.73% | 15.31% |
| $3B to $10B | 263 | 9.96% | 12.69% | 14.96% |
| $10B to $100B | 126 | 8.78% | 10.68% | 14.18% |
| Over $100B | 32 | 10.20% | 12.70% | 16.48% |
Source: BankingLens, FFIEC call reports for the quarter ending June 30, 2026. Every bank with a reportable ROE, not a sample.
Under $100 million is the outlier: the only median below 10%, and a quarter of those banks earned 3.31% or less. Above $100 million the medians bunch between 10.68% and 12.70%, and size stops telling you much. The smallest banks' top quartile starts at 12.61%, a return that would miss the top quarter in every other band. For a commercial bank, the UBPR peer groups are the tougher yardstick: they leave out savings banks, and from $100 million to $10 billion their medians run above these bands.
Why the smallest banks trail
Part of the gap is earnings, since banks under $100 million also earn less on their assets (see our ROA benchmarks). The rest is capital.
| Bank size (total assets) | Median equity to assets | Median ROE |
|---|---|---|
| All banks | 10.56% | 11.55% |
| Under $100M | 12.10% | 8.15% |
| $100M to $300M | 10.59% | 11.50% |
| $300M to $1B | 10.20% | 12.47% |
| $1B to $3B | 10.20% | 11.73% |
| $3B to $10B | 10.92% | 12.69% |
| $10B to $100B | 11.60% | 10.68% |
| Over $100B | 9.72% | 12.70% |
Source: BankingLens, FFIEC call reports for the quarter ending June 30, 2026. Equity to assets is total equity capital over total assets at quarter-end. Medians only, since the under $100M band has a long upper tail.
The two most heavily capitalized bands, under $100 million and $10 billion to $100 billion, post the two lowest median ROEs, and the most thinly capitalized, over $100 billion, posts the highest. The $3 billion to $10 billion band holds more capital than most and still reaches 12.69%, helped by the highest median ROA of any band in our data.
Same earnings, different ROE
Return on equity is return on assets divided by the share of assets funded with equity. Hold ROA steady, add capital, and ROE falls by arithmetic, however well the bank is run.
It isn't rare. Of the 2,115 banks with ROA above the 1.23% all-bank median, 341 (16.1%) still land below the 11.55% median ROE. Their median equity to assets is 14.92%, against 10.44% for the other above-median ROA banks. Rank banks by ROA instead and capital runs the other way, with more equity in the top quartile than the bottom. The likely mechanism is retained earnings: years of good results build the very capital that holds ROE down.
| Median for each group | Top quartile by ROE | Bottom quartile by ROE |
|---|---|---|
| Banks | 1,058 | 1,058 |
| ROE range | 15.67% or higher | 7.59% or lower |
| Return on assets | 1.87% | 0.50% |
| Equity to assets | 9.58% | 11.64% |
| Net interest margin | 4.14% | 3.41% |
| Efficiency ratio | 52.71% | 79.66% |
Source: BankingLens, FFIEC call reports for the quarter ending June 30, 2026. Medians within the top and bottom ROE quartiles.
The top quartile holds less capital, but capital isn't the main thing separating the groups. ROA is, 1.87% against 0.50%, built on a 52.71% efficiency ratio against 79.66% and a 4.14% margin against 3.41%. Nor is the top group thinly capitalized: its 9.58% median equity to assets sits inside the middle half of all banks, 9.06% to 12.73%.
When your ROE trails, split it before it goes in the board package: ROA against your size band, then equity to assets against the same band. Fine ROA with high equity is a capital planning question, and the tier 1 leverage benchmarks are the next stop. Short ROA is an earnings problem that thinner capital would only disguise, and the efficiency ratio is the first place to look.
Excess capital at a small bank has a price
Banks under $100 million posted a median ROE of 8.15% on 12.10% median equity to assets, the most capital of any band. The UBPR splits small commercial banks at $50 million, and the smaller group does worse: 7.12% under $50 million (peer group 8) against 9.64% at $50 million to $100 million (peer group 7).
For a small bank's board, that capital is a choice with a cost. Equity beyond what the balance sheet and growth plan need still sits in the ROE denominator, and the assets it funds earn bond or overnight rates. At a closely held bank it is also shareholder money that is neither paid out nor put to work.
Thin capital costs something too, and a small bank feels it sooner, because one large problem loan is a bigger share of its equity. The useful question for the board is whether the capital on hand has a stated purpose, such as a growth plan, a concentration it cushions, a dividend policy or an ownership transition.
Median ROE by quarter since 2023
Call report income is reported calendar year to date (see the Schedule RI instructions), so a first-quarter ROE is three months annualized and a fourth-quarter ROE is the full year. Compare like quarters by reading down a column.
| Year | Q1 | Q2 | Q3 | Q4 |
|---|---|---|---|---|
| 2023 | 11.58% | 11.51% | 11.48% | 10.65% |
| 2024 | 9.42% | 9.70% | 9.64% | 9.75% |
| 2025 | 10.30% | 10.72% | 10.93% | 10.95% |
| 2026 | 11.23% | 11.55% | Not yet filed | Not yet filed |
Source: BankingLens, median ROE by quarter from FFIEC call reports.
The median opened 2023 at 11.58%, bottomed at 9.42% in the first quarter of 2024 and was back to 11.55% by the second quarter of 2026. Like for like, the second quarter ran 11.51%, 9.70%, 10.72% and 11.55%.
The median has come all the way back, but the distribution is tighter. In the second quarter of 2023 the top quartile began at 16.72% and the bottom quartile ended at 7.09%. Those cutoffs are now 15.67% and 7.59%.
Frost Bank and the lift from leverage
Frost Bank, a San Antonio commercial bank with $53.95 billion in assets, earned an annualized ROE of 15.21% through June 30, 2026. That is the 78th peer group percentile among commercial banks with $10 billion to $100 billion in assets, where the median is 10.59% and the top quartile starts at 13.91%.
Its ROA of 1.31% is less remarkable, 8 basis points above the all-bank median and at the 56th peer group percentile. Leverage makes up the difference: Frost's equity was 8.64% of assets, against 11.60% for the median bank in its size band.
Some of what keeps that ratio low is accumulated other comprehensive income (AOCI), the equity account that mostly carries after-tax unrealized gains and losses on available-for-sale securities. Frost's AOCI is a deeper negative share of equity than the median bank's (see our AOCI benchmarks), and if those marks recover, equity rises and ROE falls on the same earnings. Frost's ROE and ROA, each with its peer group percentile, are on the Frost Bank sample scorecard.
Four adjustments before comparing ROE
- Subchapter S banks pay no federal income tax at the bank level, so their after-tax ROE is flattered against C corporation peers. When a peer set mixes the two, compare pre-tax income over average equity.
- Unrealized losses on available-for-sale securities shrink GAAP equity through AOCI and lift ROE while they last, so two banks with identical earnings can post different ROEs.
- Goodwill from acquisitions is funded with equity and earns nothing, which is why analysts who cover acquisitive banks quote return on tangible common equity. Intangible assets are on Schedule RC if you want to strip them out.
- One-time items hit the numerator, such as a securities loss from repositioning the bond portfolio or a gain on a loan or branch sale. With year-to-date reporting, an item booked in the first quarter stays in every figure for that year.
Frequently asked questions
What is a good ROE for a bank?
The median bank earned an annualized 11.55% return on equity through the quarter ending June 30, 2026, and the middle half fell between 7.59% and 15.67%. Of the 4,229 banks, 60.4% were at 10% or better. Judge ROE against banks of similar size, and check that a high ROE comes from return on assets rather than thin capital.
What is the average ROE for community banks?
Using medians rather than averages, ROE for the quarter ending June 30, 2026 was 8.15% for banks under $100 million, 11.50% at $100 million to $300 million, 12.47% at $300 million to $1 billion, 11.73% at $1 billion to $3 billion and 12.69% at $3 billion to $10 billion. The smallest banks trail partly because they hold the most capital.
Why is my bank's ROE low when its ROA is fine?
Capital. ROE is ROA divided by the share of assets funded with equity, so more equity means a lower ROE on the same earnings. Of the 2,115 banks with above-median ROA in the quarter ending June 30, 2026, 341 (16.1%) had below-median ROE. Their median equity to assets was 14.92%, against 10.44% for the other above-median ROA banks.
Which matters more for a bank, ROA or ROE?
They answer different questions. ROA shows how well the balance sheet earns. ROE shows the return on shareholders' capital, and a bank can raise it by holding less capital without earning a dollar more. A strong ROE on an ordinary ROA says more about the capital plan than about earnings.
How is bank ROE calculated?
Divide year-to-date net income, annualized, by average total equity capital. BankingLens averages equity at the prior year-end and the current quarter-end, taking net income from Schedule RI and equity from Schedule RC of the call report. The result is a bank-level figure, not the ROE a publicly traded holding company reports, which reflects holding company debt and other subsidiaries.
Where these numbers come from
Every figure on this page is computed from FFIEC data for the 4,238 FDIC-insured banks and savings institutions that filed a call report for the quarter ending June 30, 2026. We leave out the 58 non-deposit trust companies that also file call reports; they take no deposits and make almost no loans, and their returns would distort every distribution. The total of 4,238 matches the number of FDIC-insured institutions in the FDIC Quarterly Banking Profile for the second quarter of 2026, and each earlier quarter in the trend table follows the same rule. Peer group figures use UBPR peer group membership for the same quarter. You can see every one of these ratios for a real bank, ranked against its FFIEC peer group, on the sample scorecard for Frost Bank. Plans that cover your state or every bank start at $29 a month (pricing).